While Google Inc. (GOOG)
has a credible record when it comes to mobile operating systems -- having made
the booming Android operating system -- its track record when it comes to
flagship hardware is decidedly more mixed.

Every major OS release Google designates a
"flagship" hardware model. For example Android
"Eclair" 2.1 was fronted by the Nexus One. For Android
"Honeycomb" 3.0 -- Google's new tablet-specific Android distribution
-- that flagship model was the Xoom.

Global Equities analyst Trip Chowdryclaimsthat
Motorola (MMI)
is sitting on an enormous overstock of Xooms. According to his estimates,
the company produced between 500,000 to 800,000 units, but has only sold
between 5 to 15 percent of them.

That estimate means that the best-case scenario is
that the Xoom has moved an anemic 120,000 units in the two months since its
release. And the worst-case scenario is simply crushing -- that only
25,000 Xooms have been sold.

And it may only get worse. South Korea's LG
Electronics is preparing torelease
its G-Slate tablet, priced at $529 USD. And in June twonew
Galaxy Tab modelsfrom Samsung Electronics (005930) land at
under $469 and $499. And that's not to mention Dell's Streak refresh and
other coming products.

Even more troubling for Motorola is the fact
that ASUS today
launched its Eee Pad
Transformer Honeycomb tablet that is priced at $400 for a 16GB Wi-Fi model
and $500 for a 32GB Wi-Fi model.

In short the outlook for Xoom isn’t very promising.
The fact that analysts once estimated that the device would sell 3 to 5million units
makes its sales even more embarrassing.

The tablet is boldly venturing into waters of
commercial disappointment seldom sailed before. Its flop may only look
graceful in light of the ultra low bar that Microsoft'sinfamous
Kin projectset for a mobile failure. But that's not saying
much.

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This article is over a month old, voting and posting comments is disabled

People clump all of the iPad sales together, when in fact the vast, vast majority of iPads sold are wifi only. Entangling the Xoom with a wireless carrier doomed it to be perceived only on the 3G price tier, of which relatively few iPads are sold.

There is nothing wrong with the Xoom. It should have been pushed as a $450 wifi only device which can also be purchased from Verizon with a 3G/4G radio for $550-600. Having an inactive SD slot and an IOU for a 4G radio really didn't help either. It is hard to sell an expensive device when there a lot of "and, buts" to mention.